Have You Invested For Your Future? by John Spencer

Investing is one of the easiest ways to prepare for your future. Every year, millions of people get married and start families. What they don't do is take the time to plan for their future. When you are young, the future seems far away and it seems like it will be long before you need retirement. The truth is, the years pass quickly and retirement can sneak up on you. One day you are twenty something, just starting out, getting married, having children, and in the next breath you are forty something with nothing saved for the future. Those years can pass in the blinking of an eye and suddenly your future is staring you in the face. So many people charge head on into their lives without making sure that their future, and their children's future, is financially secure.

Princeton University and the Consumer Federation of America conducted a study in which they found that approximately 70% of households whose annual salaries were under $50,000 had less than $5,000 saved for retirement. By the same token, the study concluded that most Americans were living precariously, just getting by from one paycheck to the next. By investing, you put away money that will work for you, instead of you working for it. It grows without any effort from you so that by the time you reach retirement, you'll have a comfortable nest egg to live on. While it's true that every type of investing carries some amount of risk, different investment vehicles differ in levels of risk. As an example, mutual funds are considered relatively low risk, while individual stocks can be a higher risk. You also don't just have to depend on the stock market for investment opportunities. There are many options available to you that you can choose from.

Investment Fund Investment funds carry certain advantages that individual stocks do not. By investing pooled funds of retail investors, firms retain a fee and reduce risk for the investors. When funds that come from many small investors are used to make these certain investments, they expose the investors to a wider range of securities that they may otherwise not be able to access. This also cuts out high trading costs and it is easier for smaller investors to get in on the action. The two types of investment funds are open end, or mutual funds and closed end, or investment trusts.

What Is a Hedge Fund? This type of fund is typically not available to the average investor because of the income bracket one has to be in to participate. It's also more difficult to invest, and you must know much more about how the stock market works. In general, institutions and wealthy individuals use hedge funds because they have investment strategies available to them not available to the typical investor. These strategies are more aggressive than those used in mutual funds. Hedge fund investors can do program trading, leverage, sell short, arbitrage, swap, or use derivatives. Additionally, hedge funds do not have to follow the same regulations and rules that mutual funds do. The law restricts hedge funds to a maximum of 100 investors per fund. Because of this, the minimum investment amount for hedge funds is usually extremely high. In general, average investment amounts for hedge funds range from about $250,000 to more than $1 million. A management fee is paid as with mutual funds, but hedge funds are different because managers are also given a percentage of the profits, usually around 20%.

If you haven't started saving for retirement, it's never too late. Whether you're 10 or 20 years away from retirement, beginning to invest wisely now can give you some healthy retirement income by the time you're 65. If you invest, you'll be able to enjoy your retirement years without having to worry about your finances.

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